Price control for ML & Batch valution

[Former Member]

Hi,

We are implementing ECC 6.0 with IS Mill in an integrated steel plant. They manufacture Hot rolled, Cold rolled and Galvanized flat steel products starting with hot briquette iron. All production is in-house. The product structure is multi level. We have proposed to use multi level variant configuration (from the slab stage onwards) since there are a huge number of variants of the products that a customer may order. Thus a single configurable material number can represent thousands of variants. It is primarily a make-to-order scenario with mass production.. However there is considerable movement of materials across sales order segments and plant stock due to business constraints. A basic requirement of the client is the need to analyze cost on the basis of the characteristics of a variant (e.g. grade-wise, thickness-wise etc.) . They also need to know the actual cost of production for each batch. This value of the batch needs to be carried even if the batch is moved across sales order segments and plant stock.

We are proposing to use Batch valuation (which is recommended as a best practice by SAP in such scenarios) to address these requirements. However the client also needs the rollup of the variances for the previous stages of production to the next stage up to the finished product. The same is only possible with the activation of Material Ledger & Actual Costing.

However we understand that batch valuation requires the material to be valuated at moving average price “V” whereas for single/multi level price determination Standard price “S” is a must.

We request your advice whether there is any way to avoid this apparent contradiction between price control requirements of batch valuation and material ledger.

Regards

Ramesh

[Former Member]

An exapmle clarifies issue:

Material: A

Plant:1000

valuation type = no valuation type

3 and V

Material:A

Plat:1000

Valuation type= XYZ1

3 and S

Material:A

Plat:1000

Valuation type= XYZ2

3 and S

And so on...

[udo_werner]

Hi Ramesh,

I agree with Umut's statement: You can use price control S for the single valaued batches.

Your scenario is very interesting to me. I am working in the Mill Products IBU at SAP and we have currently a project running in order to create more flexibility for logistics in using materials that were configured for another sales orders. In such a scenario material valuation and cost order varainace analyis suffers.

A way out of it is the use of a modified make-to-stock with batch valuation and actual costing. So it appears very similar to your scenario. We will include our scenario in a best practice for flat steel (China) which is currently under development. Would be interesting to compare with your experiences.

Since you write they want to analyze based on characteristics, also my blog in the BPX area on metals and mining industries might be of interest for you:

<a href="/people/udo.werner/blog/2007/04/11/including-product-configuration-into-analytics:///people/udo.werner/blog/2007/04/11/including-product-configuration-into-analytics

I would also invite you to write an own blog on your scenario of costing in a steel scenario and open up the discussion. I also intended to contribute with a similar topic.

best regards,

Udo

[Former Member]

You do not have any problem.

Accounting view is created for the material itself and material batch.

The accounting view of material: Price Control and Price Determination

3 Single/multi level V This is must for the material itself.

But acconting view for material batch you have to select 3 single multi level and S.

In that case the system behaves as you want...

[Former Member]

Hi,

We tried to follow your suggestion by keeping the material master price control at "V" and price determination as "3" with automatic batch determination checked. We tried to keep the price control as "S" but it was giving as message as "Only price control "V" is possible for split valuation".

However we proceeded further with "V" and "3". But at the time of confirmation of production order it gave a message "<b>Price control (new) must be S for price determination (new) 3"</b> as per the standard SAP Material ledger.

Since the price control for spilt valuation has to be on "V" and for Material Ledger with "3" it has to be on "S" and we also need to has batch wise track.

Please if you could throw some light futher.

Regards

[udo_werner]

Hi Ramesh,

relevant is the price control of the batch itself, that is normally S. You see that when you enter in MM03 not only material number and plant but also the batch number as valuation type. Please check if you have an 'S' as price control there.

BR, Udo